Alice N. Sanders
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Alice N. Sanders in US Markets,

China buying more long-term U.S. debt

China gobbled up Treasury debt maturing in more than a year at the fastest clip on record in 2014, while shedding some very short-term debt, a Wall Street Journal analysis of the latest U.S. data show.

The net increase in China’s purchases of Treasury notes and bonds, those maturing in two to 30 years, soared by $185.683 billion last year, surpassing the previous high of $123.454 billion set in 2009, based on capital-flow data released this week by the Treasury.

China’s total holdings of U.S. government debt fell by $25.8 billion last year to $1.2443 trillion at the end of December, the Treasury said. The decline reflects large sales of Treasury bills, which mature in a year or less.

The latest data underscore China’s role in sending long-term Treasury bond prices soaring and yields tumbling over the past year. The yield on the benchmark 10-year Treasury note TMUBMUSD10Y, -0.70% fell to 2.173% at the end of 2014 from 3.03% at the end of 2013. The yield was 2.112% on Thursday.

The decline in Treasury yields has confounded bond traders on Wall Street and U.S. money managers who had expected yields to climb, given a brighter U.S. growth outlook.

An expanded version of this report appears on WSJ.com.